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U.S. Supreme Court Deals a Blow to Patent Trolls
Anonymous Coward writes "Forbes is reporting that the Supreme Court has just limited the power of patent trolls to obtain permanent injunctions against infringers as a matter of course. The court has ruled that the principles of equity apply, meaning that a court considering slapping an injunction on the infringer must consider how much damage is really being done ... which in the case of EBay's Buy It Now feature, isn't much, since the company that owns this so-called patent only has it for the purposes of suing other people." From the article: "The high court's decision deals a blow to patent trolls, which are notorious for using the threat of permanent injunction to extort hefty fees in licensing negotiations as well as huge settlements from companies they have accused of infringing. Often, those settlements can be far greater than the value of the infringing technology: Recall the $612.5 million that Canada's Research in Motion forked over to patent-holding company NTP to avoid the shutting down of its popular BlackBerry service."
If they can't get simple terminology correct, how can we trust their reporting?
For those who're not following me, consider the following quote from the article:As they've written "owners of intellectual property" rather then "patent owners", the sentence actually means:This is clearly not true.
There are shills on slashdot. Apparently, I'm one of them.
I'm not sure what you mean - but if you're saying Creative was another "Patent Troll", then I don't think you're correct.
Patent troll companies generally do not produce technology, just sit on patent portfolios. While Creative's suit has no merit, Creative have been selling mp3 players for far longer then Apple has (they even bought out a 'nano' branded model first!).
Oh - and there's another big patent threat to the iPod out there - the click wheel patent... and the company who owns that patent produces real (if crap) technology products too.
There are shills on slashdot. Apparently, I'm one of them.
(too lazy to set up an account...yet...)
This decision merely gives courts the ability to make a descision based on circumstances, which is what we needed and most of us wanted. It interprets the law to be more flexible... allows judges to decide on what should be done on a case by case basis.
It doesn't mean a court will just send a small time inventor packing. If the infringement is egregious, they can issue an injunction. If they feel that is not appropriate, they can force a monetary award... or both.
Sure, it puts more power in the hands of the judges, but I'd prefer it there than in ridged laws that can't adapt to the environment they're in.
And there's the problem. The patent office basically has demonstrated that they feel that the courts will resolve it if it's a bad patent, while the courts have, at times, ruled that if a patent was granted that it's valid, regardless of prior art, obviousness, relying on pre-existing technology that is already patented by someone else, or directly at odds with an existing patent.
As for Creative v. Apple, I've never owned either companys' music player, so I don't know if Creative has a case or not, but if Apple has infringed on Creative then real harm might have been dealt to Creative. I'm sure that lot of damages will hinge on how important the co-opted technology was on the sale of the iPod, compared to things like marketting, existing loyal customer base, integration to computer software and services (read: iTunes), and the like. The court could find Apple at fault but the amount of real damage done to Creative could be found to be fairly small if the interface itself didn't heavily influence sales of Apple vis-a-vis Creative, so Apple's payments and penalties to Creative could be small too.
As for patent portfolio companies that are basically all lawyers, fuck 'em. Make patent holders actually have to make and distribute their products in order to keep their patents valid.
Do not look into laser with remaining eye.
Well, it depends what you do with it. If you develop a working, stable product from your invention, it sounds like the supreme court will uphold your patent. However, if you aren't selling anything either because 1. Your invention had horrible flaws or 2. You really never intended to develop a product from your invention : then you aren't really out any money for someone else stepping in and making the better product. And unfortunately, today's patent laws encourage people to play "squatter" with inventions, claiming them years ahead of when they can actually develop them, ultimately leading to very useful ideas being caught in the red tape of a "I had it first!" game.
You can get 15 minutes of fame, but you can go down in history for infamy.
There are many other possibilities, but overall they're all a little brighter from the inventor/innovator's point-of-view (heck, I might even dust off some of those old ideas I've been figuring someone'd been sitting on the patent for...and I'm a classic cynic!)
**I know, I know, this is assuming a fairness that in all probability won't actually show up in court...
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The problem with the "patent trolls" idea is that it's all but indistinguishable from the "small inventor with few resources" one in many cases.
from the article:
If you are a small inventor that is actively working on developing your invention, the courts *MAY* grant an injunction, while they *MAY NOT* grant an injunction to a patent troll. They have left it up to the courts to destinguish the two cases.As another reply pointed out, these two cases are often very easy to distinguish.
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I thought the whole point of getting a patent was so that you were the only one that could legally create instances of your invention. Now it seems you can get a patent, and your competition can go ahead and use it anyway?
If you read the article, you'll find this has nothing to do with the validity of patents or eventual compensation.
What it does mean is that you can't extort an inflated price for your "technology" by getting the infringer shut down while the legal proceedings take place if you are not somehow actually suffering damages by its use.
The legal process still occurs, and if you have a valid patent that is being infringed upon, you will win. The difference is that if your never-implemented-obvious-idea gets tossed out, the "infringer" didn't have to cave in to your demands or suffer huge business losses while the proceedings occured.
Makes perfect sense to me.
- Roach
"I have a porkchop, you have a porkchop. I have a veal, you have a veal".
Have you even read the decision or background on the case? The very narrow issue decided here is whether or not an injuction should automatically be granted in infringement cases. The ruling means, that courts have to follow a set of criteria in determining if an injunction should be granted or if damages should be resolved in some other fashion (ie, pay a boatload of money). Injuctive relief will still be granted in the vast majority of cases. The court is just reminding us that it is not an automatic remedy. Allow me to cite the important part of the ruling:
Held: The traditional four-factor test applied by courts of equity when considering whether to award permanent injunctive relief to a prevailing plaintiff applies to disputes arising under the Patent Act. That test requires a plaintiff to demonstrate: (1) that it has suffered an irreparable injury; (2) that remedies available at law are inadequate to compensate for that injury; (3) that considering the balance of hardships between the plaintiff and defendant, a remedy in equity is warranted; and (4) that the public interest would not be disserved by a permanent injunction. The decision to grant or deny such relief is an act of equitable discretion by the district court, reviewable on appeal for abuse of discretion. These principles apply with equal force to Patent Act disputes.
Pamela Jones has posted an article on Groklaw written by Theodore C. McCullough Esq that does an in-depth analysis of this case based upon many of the amicus curiae briefs. I've not read it in detail yet, but it looks highly interesting.
Actually, if you RTFA, you would see that they are not stopping the small patent-owning company from claiming infringement. SCOTUS simply ruled that an injunction is not the immediate, default position. Basically, if you are a small company that has a patent on something but cannot actually produce the patented item, you can still obtain money for the infringement, but you cannot stop them from using your patent since they are not hurting your business by doing so. The infringer gets a chance to work around your patent so that they are no longer infringing, and you get money based on the level of infringement. I personally thought it was somewhat rational.
Similar to the upcoming US election results
It does not remove injunction as a tool. It merely asks that judges consider the affects of an injunction (on both the companies and their customers) and use discretion in granting them. It is still possible to get an injunction.
Gee, I would have thought that /. would have posted a story about the fact that the PTO granted a rexam of the Amazon one click patent on Friday, but I guess I'll have to wait...
Disclaimer: IANAL (let alone an IP or Constitutional law Lawyer)
I have nothing to add to the details of this particular case, but I think it is at least interesting that this appeal, from the Court of Appeals for the Federal Circuit (CAFC) was a UNANIMOUS REVERSAL. Over the past 30 years or so, the CAFC (and predecessor Court of Customs and Patent Appeals) has pretty much been the interpreter of US Patent Law. But for a few, scattered reversals by the SCOTUS, what sayeth the CAFC, rules. And the CAFC has been, over this time period, the best friend that patent applicants and owners could ask for, oncluding, beyond this question of injuctive relief, lowering the bar on what is needed to overcome a determination of obviousness (you have to show "motivation" to combine two or more references), or expanding the scope of subject matter that might be patented (software and business methods).
This is an indication that at least some of the antics of the CAFC will not be rubber stamped by the SCOTUS. Of course this is not to say that the SCOTUS won't ratify these other CAFC expansions, but it goves some hope that this judicial loose cannon might have its muzzle plugged, at least a bit.
f you've got a patent you aren't doing anything with, all this decision says is that the judge doesn't HAVE to issue an injunction against the big, bad company until AFTER you prove they've infringed your patent.
Wrong. The SC decision is about a situation where the patent has already been found to be valid and the defendant has been found to be infringing. The District Court must now weigh equity in each case and may order the company to pay to use the patented invention rather than requiring them to simply stop using it. This is not really new - there have been instances of mandatory patent liscensing in the courts before.
The principle does hurt the leverage of a patent holder in negotiating royalties with the infringer and in their ability to negotiate exclusive deals with other potential liscensees.
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